What is OTT Advertising? Over-the-Top Ads Explained

16 Min Read

OTT, CTV, AVOD, and SVOD… what do these all mean? Put your ad tech dictionary away. Whether or not you want to solidify your understanding, get a better grip on the media buying terminology, or have a massive case of FOMO – we’ve got you.

In this article about OTT advertising, we’ll cover the basic definition of OTT, the benefits of OTT ads, as well as how to get started and begin tracking results for this superior marketing channel. Toward the end, we’ll even cover some of our absolute favorite OTT examples. Let’s get started!

What is OTT Advertising?

What does OTT stand for in advertising? OTT stands for “over-the-top,” and refers to access to TV content using an internet connection instead of traditional cable or satellite. In other words, OTT refers to the technology and infrastructure used to deliver content to users over the internet.

Therefore, OTT advertising is the act of marketing to this internet-connected audience as they stream content.

This content isn’t limited to TV only, but on any device that runs on an internet connection:

• Mobile
• Desktop
• Tablet
• Laptop

OTT content is at its most optimum – from a branding and performance perspective – when viewed on TV in the comfort of your living room, but more about that later.

What Is the Difference Between OTT and CTV?

CTV (Connected TV) is a device that is connected to the internet and allows users to access OTT content on a television set. While OTT is the method of delivering video content, CTV is the device used to consume the content. CTVs include smart TVs, streaming devices, and gaming consoles, among others.

For a more in-depth comparison, learn about the difference between OTT vs. CTV advertising.

What Is the Difference Between OTT and VOD?

VOD (Video on Demand) is a service that allows viewers to select and watch video content on demand at their convenience. The main difference between VOD and OTT is that OTT is a method of content delivery, while VOD is the type of content delivered. We’ll discuss the various types of VOD in more detail below.

Types of OTT Ads

There are many ways that OTT ads can be delivered through streaming media over the internet. The most common types of OTT ads are:

• Pre-roll ads: These are short ads that appear before the main content begins. They are usually 15-30 seconds long.
• Mid-roll ads: These ads appear in the middle of the content, typically after a certain amount of time has passed. They are usually longer than pre-roll ads and can range from 30 seconds to a few minutes.
• Post-roll ads: These ads appear after the main content has ended. They are often longer than pre-roll ads and can range from a few seconds to several minutes.
• Banner ads: These are small ads that appear at the bottom or top of the screen during the content.
• Overlay ads: These are ads that appear on top of the content, but do not interrupt the viewing experience. They are often clickable and can lead to a landing page.

OTT advertising provides a range of options for brands to reach viewers through streaming media. Each type of ad has its own advantages and can be used in different ways to engage audiences and drive results.

Types of OTT Platforms

There are also several OTT platforms (or business models) that provide streaming content directly to consumers. Some of the most common types are SVOD, AVOD, TVOD, and PVOD.

Subscription-based Video on Demand (SVOD)

Subscription-based Video on Demand (SVOD) is a type of streaming service where users pay a recurring subscription fee to access a library of video content, including TV shows, movies, and original content. SVOD platforms offer users unlimited access to their content library without any commercial interruptions.

Examples of SVOD platforms include Netflix, Hulu, Amazon Prime Video, and Disney+.

Advertising-based Video on Demand (AVOD)

Advertising-based Video on Demand (AVOD) is a model of delivering video content over the internet, where the content is free to viewers, but revenue is generated through advertising. In this model, the viewer does not have to pay for the content but is subjected to ads during playback. The revenue generated from the ads is used to support the production and distribution of the content.

Examples of AVOD platforms include YouTube, Crackle, and Pluto TV.

Transactional Video on Demand (TVOD)

Transactional Video on Demand (TVOD) is a type of video-on-demand service that allows viewers to access content on a pay-per-view basis. With TVOD, viewers can rent or purchase individual movies or TV shows, and typically have a set period of time to watch the content before it expires. TVOD is often used for newer releases that are not yet available on subscription-based services, as well as for one-time events like concerts or sporting events.

Examples of TVOD platforms include Amazon Prime Video, iTunes, and Google Play.

Premium Video on Demand (PVOD)

Premium Video on Demand (PVOD) is a video distribution model where viewers can rent or purchase movies or TV shows that have just been released to home entertainment platforms before they are available on subscription-based video on demand (SVOD) or traditional physical media like DVDs or Blu-ray discs.

PVOD enables consumers to access high-quality video content from the comfort of their own homes without having to go to the cinema or wait for the content to be available on other platforms. Typically, PVOD titles are available to rent for a limited time period, usually 48 hours, at a premium price point, which is often higher than the cost of renting the same title through traditional video-on-demand (VOD) platforms.

Types of OTT Devices

There are several popular OTT devices used to access streaming media, including:

• Amazon Fire TV Stick: A small device that plugs into an HDMI port on your TV and provides access to various streaming services, including Amazon Prime Video, Netflix, Hulu, and more.
• Roku: A streaming device that connects to your TV via HDMI and provides access to numerous channels and streaming services.
• Apple TV: A device that allows you to stream content from services like iTunes, Netflix, and Hulu, as well as access live TV and sports.
• Google Chromecast: A small device that allows you to stream (or cast) content from your phone or computer to your TV.
• Smart TVs: Many new TVs come with built-in streaming capabilities, allowing you to access content without needing an additional device.
• Gaming consoles: Gaming consoles like Xbox and PlayStation also offer streaming services, allowing you to access content through your console.

These are just a few examples of the most popular OTT devices available on the market.

How Does OTT Marketing Work?

OTT advertising, when served on television screens, works like any other direct response channel – except with the immersive experience unique only to television.

We delve into this further in the section below, but OTT advertising platforms like MNTN Performance TV (that serves exclusively on TV screens and not other devices) let brands set up audience targeting, measure who is viewing an advertisement, and then view how this stacks up against their other digital marketing efforts.

It also works cross-device, meaning that the platform tracks users visiting your brand’s website after viewing OTT ads and serves relevant ads on the web and mobile along their journey until they finally convert on your website.

MNTN Performance TV offers superior reporting capabilities which track ad-side metrics like ad completion and website visits, as well as the popular measures of ROI including ROAS, CPV, and conversion rate. These benchmarks are a critical component for measuring the success of your OTT campaign.

What Are the Benefits of OTT Advertising?

OTT advertising is a game-changer when run exclusively on TV screens, as it is a performance channel in every meaning of the word. It bridges the gap from being a pure branding exercise (on Linear TV) to one that can also be measured and tracked.

Some of these marketing platforms pride themselves on their data-driven approach, while others claim to be at the forefront of precision targeting. MNTN addresses all of the concerns a performance marketer may have, packaged in a single user interface.

The primary benefits of OTT advertising include the following.

1. Raises the Bar for Creative and Content Delivery

Three words: Living Room Quality (LRQ).

We acknowledge that OTT isn’t only limited to TV, but across other internet-connected devices as well. However, LRQ serves ads exclusively on TV devices as we know that this device is superior to other devices in terms of ad experience. If you’re working with an ad platform that serves OTT ads across other devices, you’re missing out on the true benefits of this ad channel.

Inventory that isn’t served on TV screens isn’t true OTT advertising, and when marketers spend their budget on it they’re not getting their money’s worth. MNTN Living Room Quality serves 15 or 30-second non-skippable ads to deliver a premium ad experience.

2. Brand Safe, Fraud Free, and Top Tier Inventory

Serving any advertisement on low-quality inventory dilutes the impact of even the most compelling of advertisements – and is a huge waste of marketing dollars. A sweeping majority of advertisers agree that this is a huge concern of any brand, too:

We’ve selected only premium TV networks that we know are aligned to your brand, and your audience and specifically hand-picked to drive performance. These are 125+ reliable networks that we’ve all grown to know and love, like CNN, CNBC, Food Network, and more.

3. Targeting and Tracking

Where over-the-top advertising shines is in its reporting and targeting capabilities.

MNTN Performance TV partners with the leading data provider, the Oracle Data Cloud, giving advertisers access to over 40,000 third-party audience segments. You can also use first-party data from your own website visitors and reach them with retargeting ads on their other devices and OTT.

View the reports and analytics for these as they happen in real-time on our reporting dashboard – better yet, see how these perform in relation to your other digital marketing efforts through our integration with Google Analytics to get a holistic view of your campaign.

These are some of the (many) metrics OTT advertising platforms like MNTN can track:

• How many people viewed your advertisement?
• How many viewers visited your website after viewing your advertisement? 
• Which OTT device is driving more view-through conversions?
• What does a typical user journey look like from the top of the funnel through to the bottom of the funnel – across OTT, other OTT-supported devices, and my other digital marketing channels in this campaign? 

These performance metrics and KPIs can all be viewed on our reporting interface, and in any permutation to show those metrics that matter most to your brand.

Is OTT Advertising Effective?

We created an entire content series dedicated to this very topic, comparing the effectiveness of OTT advertising to well-known players in the programmatic space like YouTube, Demand Side Platforms (DSP), Linear TV, Display-Only, and Video Ads.

Apart from the inventory, tracking, measurement, and overall experience benefits – attribution is a priority for performance marketers and they should be wary of how this is measured on other OTT ad platforms. 

A legitimate performance marketing channel should be as transparent as possible, and MNTN Performance TV addresses this need through its accurate attribution capabilities via its proprietary Cross-Device Verified Visits feature.

Cross-Device Verified Visits is our proprietary technology that measures any user visits to your site following the guaranteed in-view display of your ads, in a window of time defined by you. That means you’ll know when someone views your OTT ad to completion, and what device they use to convert. And since it only takes credit if the original ad was viewed to completion, it ensures it was your ad that initially prompted the sales journey.

What Types of Results Can I Expect from OTT Advertising?

We don’t call ourselves a performance marketing platform for nothing. We’ve run the numbers across the board and are proud to report some solid averages. Note that OTT campaign results vary and may be impacted by budget, type of industry, and time of year.

• 3x ROAS
• $6 Cost Per Site Visit
• $0.03 Cost Per Completed View
• 1.82% Site Visit Rate

Can You Share Some Success Stories?

Sure! Here are a couple of case studies that we’d like to highlight:

• 48% higher ROAS with MNTN Performance TV Retargeting: We partnered with a leading home supply retailer to level up their retargeting efforts. They had originally only used display-retargeting, but this time served related ads across web and mobile to recent site visitors—as well as to viewers who had seen their Performance TV ad. The combination of multiple platforms of devices drove site visits more efficiently than display-retargeting and outperformed not only on ROAS but on Cost Per Visit and Conversions.
  
• 20% higher revenue versus one of our top competitors: Some friendly rivalry never goes astray, especially when we come up on top. A luxury e-commerce retailer approached us for some support with their retargeting efforts, and we did a head-to-head test with one of our competitors to see which one performed better. We drove 20% higher revenue at comparable spend levels, drove 6x longer average session durations, and a 680% higher e-commerce conversion rate – in fact, the retailer had to end the test two weeks early as we generated results much faster than anticipated.

• 50% lower CPA with MNTN Performance TV Retargeting: A leading non-profit education institution has been an ongoing customer of ours, and usually relied on our retargeting solutions to drive enrollments and student applications. However, they wanted a new way of getting in front of a wider audience pool, so added on our MNTN Multi-Touch feature to ensure their ads were top of mind. This happened to be their best performing campaign since launch and drove the lowest CPA (Cost Per Acquisition) compared to their display-only retargeting campaigns, and cut their total average CPA by 50% across all their retargeting efforts.

Are OTT Ads Vertical Specific?

Nope, OTT marketing is entirely vertical agnostic and benefits many categories. We have worked with global movie studios looking to drive brand awareness for their latest releases, through to retailers and F&B (food and beverage) brands. Any brand with a website or online presence to drive traffic is a suitable candidate.

Nowadays, the majority of consumers (48%) go ‘straight to the source’ and buy direct from brands. This, combined with the fact that 75% of households now own an OTT device, is a compelling case for OTT advertising.

These consumers are digital natives at heart and are used to consuming information (and purchasing) cross-device, which is one of the reasons why so many advertisers show interest in it as a marketing channel.

Read up on some of the Case Studies on our site to learn more about how our customers have found great success with Connected TV advertising.

How Do You Advertise on OTT?

As long as you have your ads created within the right specifications, then you’re ready to launch your OTT campaign in four simple steps: 

1. Upload your ad creative
2. Set your targeting parameters
3. Make your campaign memorable through related ads across your other devices to keep your brand’s message top of mind
4. Choose your budget, campaign goals, and launch date

What Types of OTT Campaigns Can You Run?

Pick your poison – prospecting or retargeting? Whichever OTT campaign strategy you choose, MNTN Performance TV offers a solution for both:

• Performance TV Retargeting: Use your own first-party CRM data to retarget users who are interested in the brand by serving them OTT ads on the big screen.

• Extend your retargeting with MNTN Multi-Touch: The ad experience doesn’t just end with an OTT ad – this is only the beginning! Once this ad is served, our technology then tracks the other devices (including desktop and mobile) and serves related ads to them to continue to engage and immerse the viewer with your brand.

• MNTN Multi-Touch as a prospecting play: Our Multi-Touch feature is flexible to your needs, and not only works for retargeting efforts but also for attracting potential new customers. Tap into over 70,000+ third-party audience segments through our partnership with leading data provider Oracle Data Cloud, to narrow or widen your targeting efforts.

How Do I Buy OTT Ads?

OTT ads can be bought in two ways:

1. Direct-buy through a publisher: Otherwise known as “walled gardens”, which are closed eco-systems (such as Amazon Prime Video), which control their own operations and are priced as a set fee.
   
2. Programmatic buys: These are real-time bids across a network of OTT advertising inventory and are usually priced lower than a direct buy. For example, when you set up a campaign with MNTN Performance TV, the software will automatically place these bids on your behalf across our network of 125+ premium publishers, but also ‘choose’ these based on your targeting parameters to efficiently spend your ad dollars and drive value.

If you’re looking for a combination of flexibility and value without having to sacrifice (or worry about) where your content will end up, programmatic media buying is a wise choice.

What Is the Cost of OTT Advertising?

Streaming TV advertising on OTT platforms is a great way to reach an audience migrating away from traditional linear television in a more cost-effective manner. Traditional TV advertising requires a large upfront commitment which significantly limits the number of businesses participating.

On the other hand, OTT ads can be purchased on a month-to-month basis, giving users the freedom to spread out ad dollars across multiple campaigns seeking different outcomes.

In addition, your dollars will go much farther on OTT, compared to cable TV advertising, when it comes to reaching specific audiences. With targeting options and conversion tracking that go far beyond the simplicity of linear, it’s easy to see why performance marketers are shifting their ad spend to Connected TV.

OTT Advertising Examples

There are plenty of great examples of OTT ads that companies use for demand generation and lead generation campaigns. Take a look at a few of our favorites!

MNTN

The first OTT example is from MNTN and features our Chief Creative Officer, Ryan Reynolds. Yeah, we’re a little biased, but that’s because we use our own OTT advertising platform to promote our business—because it works. Check it out!

Rumpl

Rumpl decided to give OTT advertising a whirl with this fantastic commercial pitching their super fashionable and super warm blanket created from recycled materials. It’s a great advertisement that immediately pulls you in and speaks directly to the soul of the adventure-bound traveler.

Bolt

A+ for the creativity on this one. As soon as you hear Sarah McLachlan’s voice, you instantly think of the traditional somber ASPCA ads she’s usually featured in. Only this time, it’s a complete misdirect as she’s actually pitching Bolt, a one-click checkout solution to reduce the number of abandoned carts for eCommerce businesses. The OTT creative is both hilarious and very memorable!

Replacements

For lovers of fancy and elegant dining table decor, Replacements is for you. This OTT example sticks to a tried and true formula of explaining a common problem, providing a solution, pitching the value proposition, and doing so in under 30 seconds. Short and sweet, just how viewers like it.

1Password

What the heck, let’s do another example with Ryan Reynolds. You have to admit, he’s a pretty fun guy. This OTT ad features 1Password, an advanced cybersecurity password manager to keep all your digital data safe. It’s another funny and memorable video creative that gets right to the point.

OTT Advertising Platforms: Final Thoughts

As you can imagine, we’ve only scratched the surface here, and our team is ready to answer any further questions you may have about OTT marketing and the benefits of OTT advertising platforms like MNTN Performance TV.

If there’s something you’d like to clarify further, or if there are any challenges you’re facing in your current digital campaign strategy, we’re here to help. Start by signing up for our CTV/OTT report below!

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